ACIT, Ludhiana V. Sh. Jagdish Singh Garcha, Ludhiana

ITA 128/CHANDI/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9989 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 25-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGHDR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.RANO JAIN, ACCOUNTANT MEMBER ITA NO. 128/CHD/2016 ASSESSMENT YEAR: 2007-08 THE ACIT, VS SHRI JAGDISH SINGH GARCHA, CIRCLE - 6, B-XX-658, GURDEV NAGAR, LUDHIANA. LUDHIANA PAN: ABHPG9658E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH,D R RESPONDENT BY : NONE DATE OF HEARING : 10.05.2016 DATE OF PRONOUNCEMENT : 23.05.2016 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(APPEALS)-3, LUDHIANA DATED 30.11.2 015 FOR ASSESSMENT YEAR 2007-08 CHALLENGING THE CANCELLATIO N OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX A CT ON THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, ORDER OF THE LD. CIT(A) IS SUSTAINABLE. 2. WHETHER THE LD. CIT{A) WAS JUSTIFIED IN DELETING THE PENALTY OF RS.73,34,148/- BY RELYING UPON THE JUDGMENT OF HON' BLE PUNJAB AND HARYANA HIGH COURT IN ITA NO. 200 OF 2013 DATED 22. 07.2015 BY 2 ASSERTING THAT CONCEALMENT PENALTY COULD NOT BE LEV IED ON AMOUNT OF CAPITAL GAIN OTHER THAN ACTUALLY RECEIVED BY THE AP PELLANT DESPITE THE FACT THAT THE SAID JUDGMENT HAS NOT ATTAINED FINALI TY. 3. WHETHER THE LD. CIT(A) WAS JUSTIFIED IN ONLY PA RTLY CONFIRMING THE PENALTY OF RS.6,09,202/- AND DELETING BALANCE PENAL TY OF RS.73,34,148/- BY IGNORING THE FACT THAT THE ASSESSEE HAS NOT DISC LOSED THE ACCRUED LONG TERM CAPITAL GAINS IN THE RETURN AND HAS NOT PAID A NY LONG TERM CAPITAL GAINS TAX IN ITS ORIGINAL RETURN AND DELIBERATELY C ONCEALED THE ACTUAL INCOME AND EVADED TAX THEREON AND WAS THUS LIABLE F OR PENALTY U/S 271 (1) (C). 2. THE BRIEF FACTS RELATING TO THE ASSESSMENT PROCE EDINGS IN THIS CASE ARE THAT ASSESSEE IS A MEMBER OF PUNJA BI CO-OPERATIVE HOUSE BUILDING SOCIETY LTD., CHANDIGAR H AND HOLDING POSITION OF THE PRESIDENT OF THE SOCIETY. THE SOCIETY MEMBERS ARE MOSTLY MLAS AND EX-MLAS. FURTHE R, AS PER TRIPARTITE AGREEMENT BETWEEN TATA HOUSING DEVELOPMENT CORPORATION, M/S HASH BUILDERS PVT. LTD . AND THE PUNJABI CO-OPERATIVE HOUSE BUILDING SOCIETY LTD ., CHANDIGARH, OF WHICH ASSESSEE IS MEMBER, THE PUNJAB I CO- OPERATIVE HOUSE BUILDING SOCIETY LTD., MOHALI, OWNE R OF 21.2 ACRE LAND, SHALL TRANSFER ITS LAND TO M/S TATA HOUSING DEVELOPMENT CORPORATION IN LIEU OF MONETARY CONSIDE RATION AND CONSIDERATION IN KIND. AS PER AGREEMENT, EACH MEMBER OF THE PUNJABI CO-OPERATIVE HOUSE BUILDING SOCIETY LTD. HAVING A PLOT OF 500 SQ.YDS. IN THE SOCIETY SHALL R ECEIVE RS. 82,50,000/- AS MONTHLY CONSIDERATION. ACCORDIN GLY, THE TOTAL MONETARY CONSIDERATION OF RS. 1,06,42,50, 000/- IS RECEIVABLE BY ALL THE INDIVIDUAL MEMBERS OF THE SOC IETY TAKEN TOGETHER. IN ADDITION TO THIS, AS CONSIDERAT ION IN 3 KIND, EACH SUCH MEMBER OWING PLOT OF 500 SQ.YD. SHA LL RECEIVE ONE FURNISHED FLAT MEASURING 2250 SQ.FT. TO BE CONSTRUCTED BY M/S TATA HOUSING DEVELOPMENT CO. LTD . THE COST OF EACH FURNISHED FLAT @ RS. 4500/- SQ.FT. HAVING THE AREA OF 2250 SQ.FT. EACH AMOUNT TO RS. 1,01,25, 000/-. THE ASSESSEE WAS THE OWNER OF 1000 SQ. YDS. OF PLO T IN THAT SOCIETY, AS PER THE AGREEMENT, HE WAS ENTITLED FOR FULL CONSIDERATION COMPRISING OF RS. 1.65 CR AS MONETARY CONSIDERATION AND TWO FURNISHED FLATS AS CONSIDERAT ION IN KIND. THE TOTAL COST OF TWO FURNISHED FLATS COMES TO APPROXIMATELY RS. 2,02,50,000/- IF DETERMINED/ESTIM ATED @ RS. 4500/- PER SQ.FT. THUS, TOTAL CONSIDERATION OF THE FULL CONSIDERATION ACCRUING TO THE ASSESSEE IS ATLEAST R S. 3,67,50,000/-. ACCORDINGLY, THIS AMOUNT HAS TOTAL CONSIDERATION ON ACCOUNT OF TRANSFER OF PROPERTY, T HE ASSESSING OFFICER CALCULATED THE LONG TERM CAPITAL GAIN AT RS. 3,53,98,171/- AND ADDED TO THE INCOME. 3. THE ASSESSING OFFICER LEVIED THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT AMOUNTING TO RS. 79,43 ,350/- ON THE TOTAL AMOUNT OF CAPITAL GAIN ASSESSED BY HIM . 4. THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS) T HAT ON QUANTUM THE LD. CIT(APPEALS) AND ITAT CHANDIGARH BENCH CONFIRMED THE ADDITION, HOWEVER, ON FURTHER A PPEAL, HON'BLE PUNJAB & HARYANA HIGH COURT VIDE ITS DECISI ON DATED 22.07.2015 DECIDED THE MATTER IN FAVOUR OF TH E ASSESSEE. THE ORDER FOR GIVING EFFECT TO THE JUDGE MENT OF HON'BLE PUNJAB & HARYANA HIGH COURT YET TO BE PASSE D BY 4 THE ASSESSING OFFICER. IT WAS SUBMITTED THAT THE SUBSTANTIAL ADDITION IS LIABLE TO BE DELETED AS PER JUDGEMENT OF THE HIGH COURT. THEREFORE, NO PENALTY IS LEVIABLE ON SUCH AMOUNT. 5. THE LD. CIT(APPEALS) QUOTED THE QUANTUM ORDER OF THE HIGH COURT IN THE IMPUGNED ORDER AND NOTED THAT AS PER ORDER OF THE HON'BLE PUNJAB & HARYANA HIGH COURT, ASSESSEE WAS NOT LIABLE TO PAY TAX ON CAPITAL GAINS WHICH WERE NOT RECEIVED DURING THE YEAR. HE WAS ONLY LIA BLE FOR TAXES ON THE AMOUNT OF CAPITAL GAIN ACTUALLY RECEIV ED BY HIM. THEREFORE, NO PENALTY FOR CONCEALMENT COULD B E LEVIED ON THE AMOUNT OF CAPITAL GAIN OTHER THAN ACTUALLY R ECEIVED BY THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR . THE LD. CIT(APPEALS) FOUND THAT ASSESSEE HAD RECEIVED C APITAL GAINS INCOME AMOUNTING TO RS. 30 LACS DURING THE YE AR WHICH ASSESSEE FAILED TO DECLARE, THE4REFORE, PENAL TY WAS RESTRICTED TO THE AMOUNT OF RS. 30 LACS AND BALANCE AMOUNT OF THE PENALTY LEVIED ON THE AMOUNT NOT ACTUALLY RE CEIVED DURING THE YEAR WAS DELETED. THE APPEAL OF THE ASS ESSEE WAS THUS, PARTLY ALLOWED. 6. AFTER HEARING CONTENTIONS OF LD. DR, WE DO NOT F IND ANY MERIT IN THE DEPARTMENTAL APPEAL. THE LD. CIT(APPEALS), FOLLOWING THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT ON QUANTUM, DELETED THE SUBSTA NTIAL ADDITION ON WHICH THE HON'BLE HIGH COURT HAS DELETE D THE QUANTUM ADDITION. THE REVENUE MERELY CONTENDED IN THE GROUNDS OF APPEAL THAT JUDGEMENT OF THE HON'BLE PUN JAB & 5 HARYANA HIGH COURT HAS NOT ATTAINED THE FINALITY. THIS ITSELF IS NO GROUND TO LEVY PENALTY AGAINST THE AS SESSEE. ONCE QUANTUM ADDITION HAVE BEEN DELETED, NO PENALTY IS LEVIABLE ON SUCH AMOUNT OF ADDITION. THE DEPARTME NTAL APPEAL, THUS, HAS NO MERIT AND IS ACCORDINGLY DISMI SSED. 7. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (RANO JAIN) (BHAV NESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23 RD MAY, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD